Is It Time To Trade Pricey Gold Bars For Cheap Houses?

After this week’s poor U.S. housing data, might the average home be nearing its low? Priced against gold it might be.

Dropping hard as the gold price doubled and more since 2006, the average U.S. home is now priced at 103 ounces of gold, little more than one market-approved gold bar for settling a 100-ounce Comex gold futures contract.

Housing has only been cheaper against gold, according to the rough-and-ready averages spat out by the U.S. Census and other major estimates, in 26 of the last 121 years. It’s currently priced around half the long-run average of 201 ounces.

Might there be further to go on the downside? One key difference is that there is no homogeneity in housing. Unlike the fine content of a gold bar or coin, no two properties are ever quite an exact copy. So buying or selling the average home, especially in a nation of 313 million souls, can only ever be notional.

Since the housing bust began, the average U.S. home has lost better than 70% of its value in gold. It’s dropped nearly 80% since the gold-market found its own floor back in the early spring of 2001.

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I think we have to get through the currency crisis first before calling a house/home a bargin. Gold is one measurement of value, demand is the real meaning of value. If nobody wants it whats it worth? Extremism in our economy, what will they think of next?